HOW'S EUROPE FARING? Well, last summer, bombs went off in Spanish resorts, tourists found themselves minus hotel rooms in Corfu due to overbooking, mobs of visitors fought for space at the big Mediterranean beaches, a new 15-percent tax on almost everything was introduced in Britain, large numbers of air travelers got hung up at airports because of strike-associated delays, and so on.

This summer? If you go by the ads, things are clearly looking up:

"Today, Spain is still one of the few remaining bargains in the world."

"Ireland -- a country of magical miles, moments and memories."

"France. Still the most desirable destination in the world."

"Affordable Norway."

"Yugoslavia was never more irresistible."

"Italy is one of the few remaining places in Europe where the dollar still buys a lot."

The real message? Don't color it black or white. Europe, like the rest of the world, is a mixed bag of good and bad news that accumulates almost too fast to gauge. If you've got it in mind for this summer, better take time to reexamine both the hyperbole and the horror stories, and try to separate the myths from the realities. For instance:

"You don't dare go to Europe without a hotel reservation." Basically true if you go to, say, Oberammergau from the end of May through September when the Passion Play is presented, the Mediterranean resorts in July and August, Prague and Budapest anytime this summer. If you don't have a confirmed reservation during June in or around Rome, better forget that, too; the European soccer championship is on then.

Of course, that's just the tip of the iceberg. More warning signs will no doubt pop up later. London, for instance, gets sticky around holidays and is generally short on first-class accommodations year-round. In fact, in most European cities, conventions, conferences and festivals have gone a long way toward destroying spontaneity in travel. Still, if you figure out when the crowds are not scheduled to come, and if you're willing to take pot luck, there's almost always something available.

On the plus side, it's much easier to make reservations from here than it used to be. Most first-class deluxe hotes have U.S. representatives that travel agents can contact for an immediate or quick confirmation. Or you can call them yourself; quite a few numbers are given in the Hotel-Motel Redbook on hand in most libraries. Many airlines assist as well, offering names of places in a given price bracket, in addition to handling the reservations job for you.

Smaller (i.e., inexpensive) hotels outside major cities are a tougher proposition. Best bet if you don't know exactly where you want to stay is to write to the local tourist office, ask if they can suggest and make a reservation for you, and send international postal reply coupons to facilitate a response.

For late, late starters, there's also something new under the sun. Most European cities have hotel reservations bureaus at airports and train stations, but in Frankfurt they're now experimenting with "Dial a Bed," a vending machine that sells hotel vouchers. Fifty-six hotels are on a computerized system that allows would-be guests to punch bottoms relating to their needs (type of room, amenities, price, length of stay) and have what's available revealed. If they like it, they can then buy it by inserting a 10-mark note (about $5.30) as a deposit.

"Eating and drinking are sky-high in the big tourist centers." It's true that in a recent travel supplement, the London Sunday times described $9.20 as "cheap" for a restaurant dinner in Spain. But if you think they're giving these things away anywhere, especially in a major city, have another look. The $20 lunch is hardly unknown in Manhattan, the $1 ice cream cone is a reality in many places, and so is the $8 room-service breakfast. Thus the Travelers Law for 1980: Anyone who can afford to vacation in New York can pull it off anywhere in Europe.

As for feeding and watering in particular, the trick for Europe is to learn the variations in rules. Cafe-sitting in Paris, for instance, comes high not because of what you have but because you sit in a high-rent area to have it. The same sandwich or coffee at a cafe counter comes much cheaper. Moreover, southern Europeans aren't accustomed to taking cola, milk, coffee or tea with a meal. In fact, for economy they have them elsewhere.

Order a light, one-dish meal in many European restaurants, and you'll still get a heavy check; there are "cafes" and similar places for snacks. Lots of full-service restaurants, to protect themselves from nonunderstanding tourists, have taken to establishing minimums. You can always ask questions at tourist offices, but skim your public library's guidebooks in advance, too.

"A Eurailpass is the answer to everything." Could be, but stop and think.

A Eurailpass costs $210 for 15 days of unlimited travel, $260 for 21 days, $320 for a month and so on. Do you really intend to take a train a day or thereabouts and, if so, is a pass still the right answer financially? For instance, a round-trip ticket from Paris to Marseilles costs $157.80 (that's in first class, like Eurailpass; second class is $105.40), has no time limit and allows stopovers in such towns as Beune, Macon, Dijon, Avignon, Lyon.

In the same way if you stay just in Germany, a GermanRail Tourist Card slightly undercuts the Eurailpass 15-day price, is available for as few as nine days and for second- as well as first-class travel. Travel agents and national tourist offices can give you particulars. To comparison-shop on your own, French, German, Swiss and Italian national railway offices are listed in the New York phone book and additionally: French in Miami, Chicago, Los Angeles and San Francisco; German in Boston, Houston, Los Angeles, Chicago and Toronto; Swiss in San Francisco and Toronto.

"A package tour is the most affordable way to go." If you want to save time and effort (or require a "Host" or "Escort"), yes. On the other hand, if you want to cut costs, anyone willing to work at it can normally beat a package price. Few tours offered today qualify as the cheapest way to go, nor do many represent a saving on what you'd pay if you bought the parts yourself. Futhermore, it does take time to check your features and the tour company. The British Broadcasting Company recently caused quite a stir in that country by pointing out these things, yet they're hardly news. What isn't always pointed out is that tour prices are often subject to surcharges even after you've paid.

"Europe is still full of lovely little inns that are big bargains because no one knows about them." Yes, Europe is still full of lovely little inns, but they're very much known, and those in Britain especially have become quite popular and accordingly have raised their prices. The Priory at Bath, for example, is now roughly $95 double, $48 single; Ye Ole King's Head of Chester is about $40 double, $30 single; the attractive Mermaid Inn, Rye, is approximately $45 double, $23 single.

Similarly, the government-associated inns (pousadas) of Portugal will hit new highs this summer: $33 to $45 double, $31 to $43 single. Those of Spain (paradores) are, for the most part, in the $29 to $42 double range.

A number of Germany's most attractive inns have organized under the name of "Romantik Hotels," and France has its "Logis de France"; most of these units are still moderately priced if not old-fashioned bargains.

For the fly-drive set, what has been the "hush, don't tell anybody" thing was farmhouse accommodations in Italy. Now these are being "organized" too, so prices of $10 a night (often less) for bed and breakfast no doubt will soon be moving right along.